By Xavier Fontdegloria

 

The U.S. services sector gained momentum in November, hitting a record-high growth rate for the second straight month, data from a purchasing managers survey compiled by the Institute for Supply Management showed Friday.

The ISM Services Report on Business PMI rose to 69.1 in November from 66.7 in October, beating the 65.0 consensus forecast from economists polled by The Wall Street Journal.

The index, which marks an all-time survey high, signals that the U.S. services sector registered a broad-based expansion in November as it stood well above the 50-point mark that separates growth from contraction.

Demand for services providers continues to outpace supply, which has been affected by capacity constraints, shortages of labor and materials, and logistical challenges, said Anthony Nieves, chair of the ISM Services Business Survey Committee.

The ISM services business activity index increased to 74.6 in November from 69.8 the previous month, pointing to a sharp acceleration of incoming work. The new orders index remained at 69.7, signaling strong demand.

The employment index rose to 56.5 from 51.6, suggesting that firms increased the pace of hiring over the month.

Supply-chain strains showed no signs of easing, but didn't worsen either. The supplier deliveries index remained unchanged at a high 75.7, while the prices index fell slightly to 82.3 from 82.9.

"Late deliveries and shortages continue. Disruptions seem to be declining somewhat, as suppliers and customers are finding innovative ways to keep supplies moving," said one respondent from the public administration sector.

"Inflation and supply chain issues have caused cost increases and stockouts, but sales continue to be strong, with a positive outlook for the next quarter and beyond," said another from the wholesale trade sector.

 

Write to Xavier Fontdegloria at xavier.fontdegloria@wsj.com

 

(END) Dow Jones Newswires

December 03, 2021 10:35 ET (15:35 GMT)

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